Mosaic (MOS) shares, after gaining 10% on Thursday on news that Vale (VALE) was in talks to acquire, are off fractionally to $49.70 and option volume is 3x the daily average. Traders are now positioning ahead of earnings, which are slated to be released July 22 (after the bell).

Notable options trades were a “risk reversal” in the September 45 puts – 65 calls done for a $2.25 debit and probably tied to stock as part of a “collar” — buying puts and shares while selling calls. Good volume in the August series and looks like much of it comes from setting up a butterfly in the August 50/55/60 which has seen 2,500 on the wings and 6,900 trade at the 55 body. Implied volatility is flat at 67% on the day, but the overall directional sentiment seems to suggest the “smart money” camp is betting on additional short-term gains in MOS.